Australian bond futures prices are lower on expectations that the US Federal Reserve might raise its interest rate sooner than expected.

The US Federal Reserve has not raised the Federal Funds rate since June 2006 and is not expected to increase it until next year.

“Selling continued in US Treasuries on concerns that investors could be underestimating how quickly the Federal Reserve may raise rates,” ANZ economists said.

“Australian bond futures outperformed US Treasuries across the curve.”

At 0830 AEST on Wednesday, the September 2014 10-year bond futures contract was trading at 96.435 (implying a yield of 3.665 per cent), down from 96.445 (3.555 per cent) on Tuesday.

The September 2014 three-year bond futures contract was at 97.190 (2.810 per cent), down from 97.200 (2.800 per cent).

Economic data that will be of interest to the market on Wednesday includes the Westpac/Melbourne Institute Survey of Consumer Sentiment.